Under Obama, union watchdog napped

Nearly six decades ago, Congress overwhelmingly passed the Labor-Management Reporting and Disclosure Act (LMRDA), which requires unions to publicly disclose financial information. Two of the reasons for the disclosure requirement were to give union members the ability to properly assess the competence of their union’s leadership and to fight union corruption.

The LMRDA is enforced by a small office at the US Department of Labor, called the Office of Labor-Management Standards (OLMS). In FY 2016, OLMS had a staff of just 199 full-time equivalents with a budget of $40 million. Somehow, this agency is supposed to enforce union transparency rules covering thousands of unions and help protect the billions of dollars in assets for millions of union members all across the country.

To pander to its Big Labor buddies, the Obama Administration intentionally neglected OLMS and failed to vigorously enforce union transparency rules. On Obama’s watch, the OLMS budget and staffing declined. With fewer resources, OLMS lowered its goals and conducted fewer union audits and fewer criminal investigations. Indictments and convictions also trended down under Obama.

From FY 2010 to FY 2016, Obama’s Department of Labor conducted zero International Compliance Audit Program (I-CAP) audits, which are audits of large national and international unions. Furthermore, the number of compliance audits of local and intermediate unions fell precipitously from 798 in FY 2008 to 245 in FY 2016, a decrease of over 69 percent. Although the 798 audits conducted in FY 2008 represented a high water mark for the last two Administrations, OLMS conducted nearly twice as many audits in a single year during the Reagan Era when the agency had a much larger staff.

In addition, criminal investigations declined dramatically from 393 in FY 2008 to 234 in FY 2016, a decrease of more than 40 percent. Indictments fell from 132 in FY 2008 to 93 in FY 2016, a decrease of over 29 percent. Convictions declined from 103 in FY 2008 to 87 in FY 2016, a decrease of over 15 percent. Clearly, the Obama Administration’s willful neglect of OLMS had an effect.

According to Don Todd, the former Deputy Assistant Secretary for the Office of Labor-Management Standards, “When agency resources are cut too deeply, it’s not possible for the agency to accomplish much of its mission. That’s a serious problem for a law-enforcement agency like OLMS. If there’s no cop on the beat, dishonest union officials will be more likely to steal from their members knowing that their chances of getting caught are low.”

For the sake of comparison, consider the Federal Election Commission’s level of funding and staffing. Like OLMS, the FEC enforces transparency rules and oversees billions of dollars in assets. Unlike OLMS, the FEC has much better funding and staffing. For example, the FEC had a budget of over $70 million for FY 2016 – roughly 75 percent more than the OLMS budget for that year. The FEC also had 330 full-time equivalents in FY 2016 – over 68 percent more than OLMS had that year.

Voters deserve a competent agency that works to ensure the public’s access to timely and accurate campaign finance information. Similarly, union members deserve a vigilant agency with adequate funding and staffing that enforces union transparency rules and periodically checks the books of their union to ensure their funds are not being embezzled. Unfortunately, that is not the case today.

Much work needs to be done at OLMS just to compensate for the work that was left undone during the Obama years. To make this a reality, Congress should direct more of the Labor Department’s funding to OLMS so the Administration can better enforce union transparency rules and combat union corruption.

Richard McCarty is the Director of Research at Americans for Limited Government Foundation.